Worries over whether Athens and its creditors can reach a bond restructuring agreement was again hobbling the recent impetus of the growth-focused asset rally, the FT reports. The FTSE All-World equity index, which by the end of last week had bounced almost 9 per cent in 2012, was up just 0.1 per cent on the session. Asia was mixed, with Shanghai off 1.6 per cent, Tokyo down 0.1 per cent but Seoul up 0.4 per cent after some shippers in the region made gains as the Baltic Dry Index, a barometer of shipping demand, ended a 33-session losing streak. The FTSE Eurofirst 300 opened flat but is now down 0.4 per cent, while S&P 500 futures suggested Wall Street would shed 0.1 per cent later in the session. “The rally in risky assets has gone a long way, with global equities soaring by more than 18 per cent from the October lows …” said Barclays Capital in a note to clients. The recent surge, Barclays added “can be explained by a combination of easy money in G10; reduced risks in Europe; resilient global growth; and extreme pessimism/short positioning in the second half of 2011”.

A glut of ships has driven prices to ship dry commodities to their lowest level in 25 years, raising fears of fresh crisis for an industry vital to global trade, the FT reports. The key indicator of earnings for vessels carrying iron ore, coal and other bulk commodities – the Baltic Dry index – fell on Wednesday to its lowest level since August 1986, extending a streak of consecutive daily falls from December 12 that seen the barometer fall 65 per cent. The index is widely followed outside the industry as a gauge of global trade. However, analysts said the latest slide in prices reflected mainly the impact of a surge in deliveries of ships ordered in the shipping boom before the 2008 financial crisis, which has outpaced still-growing demand to move goods. The declines – which have seen average charter rates for Capesize ships, the largest kind, fall from $32,889 a day on December 12 to $5,327 on Wednesday – also reflect the impact of temporary factors, including the early Chinese New Year holiday and poor weather in Australia and Brazil. Earnings for most vessels on the short-term spot market are now well below operating cost levels, raising concerns about the finances of many ship operators, particularly those with high numbers of vessels leased from other owners at relatively high prices.

We bring this up because there is apparently somewhat of an après-Chinese New Year effect when it comes to the Baltic Dry Index. And since the Chinese New Year fell early this year, the BDI’s usual post New Year pick-me-up should be just around the corner. Read more

Cardiff writes mostly about US macroeconomic issues, with daily excursions into other topics about which he claim no expertise. Before Alphaville, Cardiff spent a little more than two years as a reporter at Dow Jones Financial News covering investment banking, asset management, and private equity. Along the way he has written freelance pieces on a variety of other topics from behavioural psychology to Muay Thai, the latter also being a personal interest that involves frequently getting kicked in the shins (and torso, and head).

Freight rates surged to a two-month high yesterday as the global scramble for grain imports combined with resurgent demand from Chinese steelmakers, the FT reports. The Baltic Dry Index of shipping costs for dry bulk commodities – including iron ore, coal, grains and cement – has risen 67 per cent in just over a month after it slid to its lowest since early 2009. Yesterday, it gained 3.1 per cent to 2,841 points, the highest since mid-June. With uncertainty over the strength of the economic recovery making investors wary, the BDI’s rally will be seen as a bullish factor by some, who view it as a barometer for the health of the global economy.

The Baltic Dry Index (BDI) — a measure of shipping costs for dry bulk goods — suffered its 29th consecutive daily decline on Wednesday, to record its longest losing streak in more than six years, according to Bloomberg.

It’s news that David Rosenberg at Gluskin Sheff, amongst others, managed to get pretty excited about on Wednesday. He, for example, thought it’s the sort of story that should have made the front pages by now: Read more

The cost of shipping dry bulk commodities such as iron ore, coal and grains on Thursday extended its losses to a near nine-month low as the freight market felt the effects of lower buying by Chinese steelmakers, the FT said. The Baltic Dry index of freight costs dropped to 2,502 points on Thursday, its lowest since early October. The index has now fallen 40 per cent since its peak a month ago.

Many analysts view the Baltic Dry Index, a measure of shipping costs for dry commodities, as a forward macro-economic indicator. So should we be worried by the fact that the index last week experienced its biggest weekly decline since 2008? Analysts say yes. Read more

The river Fal in Cornwall is one of South England’s great beauty spots. Normally.

Because of its depth and close links to major Atlantic shipping lanes, in times of economic crisis, the Fal estuary is also a cheap place to park massive container ships: they can be mothballed in the mouth of the Fal far cheaper than they can be held up in port; awaiting shipments that might never materialise.Right now, the Fal is full of them. And indeed, a glance at the Baltic Dry Index – the barometer of dry shipping rates – tells why: Read more

Global shipping rates are set to fall by 74 per cent this year as commodity demand continues to fall in Asia and the massive glut of vessels ordered during the boom years finally takes to the seas, the Telegraph reported. The expected collapse in rates, which could push dozens of shipowners close to bankruptcy, comes after a 92 per cent decline in the Baltic Dry Index (BDI) of shipping rates over the course of last year. The misery is expected to continue well into 2010, with a further 15 per cent drop in rates before any rebound brings relief to fleet-owners.

The mixed signals can’t get any more mixed, the Baltic Dry Index, which tracks rates to ship dry commodities, is up 3.6 per cent on Thursday to a new 4-month high. Here’s a historical chart for context.

We were waiting to see if it was a one-day phenomenon, but no – Wednesday’s 15 per cent rise in the Baltic Dry Index has been sustained through another day.

Wednesday’s move to 1,316 points was in fact the biggest daily increase in almost 25 years and came reportedly on signs of a recovery in raw materials trade. On Thursday the index, which tracks freight prices for ships carrying dry commodities, went on to set its highest level since October at 1,498 points. The boost came despite weakness in LME London metal prices on the day. On Friday, however, sentiment had fed well and truly through to global metal prices. Shanghai copper prices were up 5 per cent and 11 per cent in total for the week, while in London copper rose 5.3 per cent in morning trade. Read more

The Baltic Dry index, the benchmark for freight costs for dry bulk commodities such as iron ore, coal and iron, on Wednesday jumped almost 15% to 1,316 points. the biggest daily increase in almost 25 years, on signs of a recovery in the raw materials trade. Shipping brokers said that demand for the largest vessels, known as Capesizes, is slowly recovering as Chinese steelmakers buy more iron ore from Australia and Brazil after running down their ore inventories. The index is still well below last year’s all-time high of 11,793 points, but has recovered 98.5% from its December 22-year low of 663 points.